Apple Preps Bond Sale for Stock Buyback Initiative

[FluJunkie]

Interesting factoid from the back story: The financial markets expect Apple to be able to sell bonds at 45-50 basis points over 10-year federal note rates, which means they will come in at around 2.4%. Meanwhile, the common stock pays a dividend of around 3%.

I was wondering what the pricing would be. It's essentially free money.

 

[lkrupp]

As an Apple shareholder, I am intrigued and I'm not completely convinced by this.

Simple. It's cheaper to pay the interest on the bonds than to pay the income tax on the overseas cash that would have to be repatriated in order to complete the stock buyback plan.

 

[UBS28]

Good move by Apple. The stocks are extremely low right now and with the Apple TV around the corner they'll be paying it back in no time.

Based on what is the stock price extremely low? Some people think Apple is still insanely overpriced. Once Apple capital reserves are gone, I expect Apple stock to drop to low levels.

 

[lildimsum7]

Based on what is the stock price extremely low? Some people think Apple is still insanely overpriced. Once Apple capital reserves are gone, I expect Apple stock to drop to low levels.

but Apple thinks Apple stock is undervalued, which is why they're increasing buyback. do you really think "analysts" and a bunch of randoms know the value of Apple better than the actual company? and why would you expect Apple to "drop to low levels"? what kind of analysis did you do to support your conclusion?

 

[IJ Reilly]

but Apple thinks Apple stock is undervalued, which is why they're increasing buyback. do you really think "analysts" and a bunch of randoms know the value of Apple better than the actual company? and why would you expect Apple to "drop to low levels"? what kind of analysis did you do to support your conclusion?

Anaysis? When you are from the spouting off school of declarative statements, you don't need no stinking analysis.